Archives for March 2012

How Do You Save Money on Groceries?

Food Prices
With Financial Literacy month starting on Sunday, I want to help you to save more money. I figure that the best way to do that is by consulting the experts, and by experts I mean you. I know you have some tried and true money savings tips! As they say, “Only the foolish learn from experience – the wise learn from the experience of others.”

I love picking up tips from other people. This April, I want you to show off your savings expertise. Watch Facebook, LinkedIn or Twitter. I’ll be giving you different savings topics throughout the month and asking for your advice.

The first topic is food shopping. How do you save money on groceries? I’ll start the conversation by telling you how I do it.

On Sunday, I sit down and make a list of what we need during the week. That includes a meal plan.

When I plan my meals, I make sure that I plan some leftovers so I don’t have to cook every night. Sometimes, I even cook ahead on the weekends and freeze the extra food. (Ordering take-out can be a downfall to my budget.)

My meal planning also revolves around sales. That’s why I like doing meal planning on the weekend with the Sunday paper in front of me.

Speaking of the Sunday paper… Yes, I do use coupons. I don’t make myself crazy. I cut them out of the weekend fliers and sometimes will even go to the manufacturer’s website to download them.

Then, I calculate how much my plan will cost me. I compare my cost to my budget and make adjustments to my food plan if it looks too pricey.

Finally, I shop for food with cash. This stops me from over-spending. If I use my debit card, I find myself adding items to the cart that I hadn’t planned on buying.

What do you do to save money when you food shop? Join the discussion.

Remember to follow us on Facebook, LinkedIn and Twitter to answer this and other questions throughout the month of April. You could literally save someone else’s bacon, and learn some new tricks yourself!

3 Important Tips for Paying off Credit Card Debt

Last Thursday, I talked about balancing debt repayment with building an emergency savings fund. This is the second part of that post.

For the actual pay debt repayment, there are two ways to do this.

If you are the type of person that needs to see forward movement to keep you motivated, then pay off the smallest credit card balance first, then work your way to the next smallest until you’re done. This will give you a feeling of reward and the financial momentum to keep this going.

If paying interest rates and fees bothers you, you will want to pay off the highest interest rate credit card first and then work your way down to the lowest interest rate. You will have the satisfaction of paying less and less in interest charges each month.

Either way excessive credit card debt is the enemy of your budget.

Live within your means.

Because your credit is so important to your finances, you will have to find a way to live within your means. That means only using your credit cards when you know that you can pay them off in full each and every month.

So many people struggle with credit card debt. Just as they get their debt paid off, something happens and they are in debt again. You can use your cards for the consumer protections and to keep a healthy credit score, but learn to use your credit cards the way you would a check or debit card – keep your purchases within your monthly cash flow.

Balance Debt Repayment with Savings

I get asked all the time for advice on credit card debt. We all know that credit card debt is the enemy of a monthly budget. Your money has better things to do than paying down finance charges and interest. But, if you are currently in debt, then you need to do something about it.

Most of my clients want to know the best way to pay off their credit card debt. Most people ask me if they should put all their resources into debt repayment. My answer to that is “no”. There is one thing that I believe everyone should do while paying off credit card debt – build an emergency savings fund.

You are probably saying that you have no money to save! I’m telling you that you need to find the funds. Your credit card debt may seem like your biggest priority, but if you take all your extra money to pay down debt, then you will find yourself running up credit card debt any time an unbudgeted expense pops up. These unexpected budget breakers are such regular events that we should learn to expect them. Your car breaks will need to be replaced, an appliance will need a new part, the roof will need new shingles. It’s inevitable. I could go on, but you get the idea.

You need to find a balance in your budget with savings on one side and debt repayment on the other.

The easiest way to build an emergency savings account

Each pay period you should have some money automatically transferred from your paycheck to a savings account. Start out with a small amount on a regular basis. That way you won’t feel the pinch and you will be setting aside money to use when something unexpected happens so you won’t have to use your credit cards.

A good way to pay off debt

To pay down your credit card debt:

Make a detailed list of each credit card, the amount owed, the credit limit, the interest rate(s) and minimum payment amounts
Look at your options – can you transfer the highest interest rate debt to a lower interest credit card (maybe you have room on a credit card you already have)?
If you are considering opening up another credit card, please think before doing so. There a number of factors that are involved here . Check my website www.JillRussoFoster.com for the five factors that make up your credit score.

On Monday, I will talk about paying down your debt.

Less Junk Mail Equals Less Spending?

Having trouble controlling your spending? Try something new – control your mail!

You heard me. Control your mail. For the past five years, I have worked extremely hard to get off advertisement mailing lists. My mailbox is no longer stuffed with unwanted fliers and catalogs. Oh, I still get catalogs and fliers, but only from my favorite stores. And, I have asked each of my favorites not to share, rent, sell or do anything else with my contact information. Thanks to privacy laws, I can completely trust all of them to keep my personal information to themselves.

This has reduced my mail considerably.

You are probably wondering, “What’s the connection here? I thought you were talking about controlling spending not junk mail.” Easy. What I don’t see won’t tempt me. No more impulse buying because a slick ad has convinced me I need it. If I didn’t know I needed it before, then I will probably live without it. And if I do need it, I won’t need a glossy image to sell me on it.

I don’t think I’m weak minded. These ads are designed to make you hunger for the kind of ideal life that only an expensive food-processor can give you. If you’re like me, you’ve spent many a weekend morning browsing through Sunday fliers, lusting after small appliances and “just in time for spring” capris.

Now, I have less mail to go through and more money saved. This is a bonus for my time and my budget. Try it yourself. You won’t believe how much less spending you have to list on your budget tracker with this little step.

How did I do it? By contacting these companies:

Direct Marketing Association, Mail Preference Service, P O Box 9008, Farmingdale, NY 11735
Mail Preference Service, Preference Service Manager, Direct Marketing Association, P O Box 3079, Grand Central Station, NY 10163
Companies that I receive subscriptions from (example – magazine subscriptions)
Store credit card companies and banks – request not to receive offers from them or their partners
www.OptOutPrescreen.com or 1–888–567–8688 to limit the offers you receive for pre-approved credit cards

That’s all you have to do! Yes, it takes some work, but it will pay off in the long run. You don’t have to tackle this every day or even during precious relaxation time.

What I did, was set aside the junk mail and take it with me for those annoying “hurry up to wait” appointments. Then I would make the phone calls from my cell. You know, when you’re sitting in the doctor’s exam room for 20 minutes waiting for a physical. Or when you have to leave early to meet someone across town “in case of traffic” then end up sitting in the parking lot waiting for the other person to show up. If you do it that way, you’ll be regaining time, not just saving time.

You may have a savings bond and not know it

Have you ever received a savings bond as a gift? In my family, that was what you received as a gift for most birthdays and holidays. My parents always gave savings bonds even to their grandchildren. It was a big thing in my family.

The US Treasury began issuing saving bonds back in the 30’s. Now, many of those bonds have stopped earning interest. If you remember receiving these as a child, you should locate them and cash them in. You may have been too young to remember receiving a bond as a gift when you were a child, so check with your parents and family members to see if they remember.

If you have the physical bond(s), you can look up the current value with the serial number. If you are not sure, you can check if you have a bond by going to Treasury Hunt at https://www.treasurydirect.gov/indiv/tools/tools_treasuryhunt.htm. You will look up bonds by your social security number. Back in the day when I was younger, my savings bonds were purchased with the purchaser’s social security number, so you may need to know their social security number to check. You may need several family members to check their social security numbers to check for unclaimed bonds.

For more information, you can contact the US Treasury by calling 800-722-2678 or through the website www.trasurydirect.gov. Also, paper savings bonds will not be issued anymore (as of January 1, 2012).

Double Your Savings with Matching Funds

I get this question all the time: “How can I make my money grow faster?” I’m not an investment broker, so I can’t give you advice on buying stocks or bonds. And, personal savings accounts don’t pay as much interest as they used to, so I can’t help you there either.

But, there are two types of savings plans that offer matching funds, which means that your employer, or your state, will put their own money into your account to increase the money you put into the account. Never turn down FREE money! (Normally, I would tell you that there is no such thing as free money, but with these 2 plans there really is.)

Employer Matching Funds in Employee 401K Plans

If you work for an employer that offers a 401K or retirement savings, participate in the plan as soon as you are eligible. If you are eligible and you haven’t signed up yet, find out how soon you can start. Many companies offer to match your contributions. Not only that, but you will be putting your pre-tax dollars into this account, which means you can report less income for income tax purposes. That could mean a bigger tax refund or a smaller tax bill.

If you think you don’t have enough money to contribute, start out small and then increase your contributions. I have clients who did just that, who haven’t felt the loss in their monthly budgets. Remember: the first decision is to start to save. After that, you’ll find a way.

State Matching Funds from an Individual Development Account (IDA)

Another way to get matching funds is from an Individual Development Account (IDA). These accounts were designed to promote good money management and to teach savings habits. To open an IDA account, you need to have a specific goal in mind, such as saving for a home down payment, starting a small business, tuition for post-secondary education, etc. Once you meet eligibility requirements, you will put money in your IDA account on a regular basis, and your funds will be matched. Check with your individual state for eligibility and participating organizations.

But, what if you aren’t eligible for a 401K or IDA?

Don’t be discouraged. If you’ve made the decision to save on a regular basis, set it up to happen automatically. It’s the best way to make your money grow. If you have to go to the bank to put cash into savings, something will come up and you will decide to spend it instead. You will tell yourself that you’ll save next week, then next week comes and goes and you still won’t deposit the money into savings. When you have it taken out of your paycheck automatically, you never see the money, so it’s less tempting to spend it. With interest and time, your money will grow.